The Thailand government has given a $1.8 billion bailout for struggling flag carrier Thai Airways.
According to local media The State Enterprise Policy Committee meeting approved “in principle” the proposal to prop up the airline. The Finance Ministry is expected to guarantee a loan worth 50 billion baht to rescue the business.
In an announcement on Wednesday, the government also confirmed that a committee of aviation and business professionals will oversee the airline as it restructures its debts and raises capital.
The committee assigned a financial consultant to work out a rehabilitation blueprint to be submitted to the Thai Airways board. Central to the plan is the bailout loan. The airline will remain a state enterprise. A source at Government House told local media that the Finance Ministry will guarantee the loan until the end of the year.
The amount falls below the original plan for a 70 billion baht loan. Moreover, the airline will have to renegotiate its debts with creditors and adopt cost cutting measures.
The loan will be disbursed in instalments to spur the airline to stay on track with the rehabilitation. The extension of the loan depends on the content of the rescue plan and the company’s success in implementing it as well as the bailout conditions.